Business methods making comeback on appeal at the Board–Citing Berkheimer PTAB panel holds Examiner must show evidence

We have previously reported on the very low reversal rates of abstract idea rejection within tech center 3600, home of business method art. Indeed, over the past few months, the reversal rate has been about 12%, as shown on the Anticipat Research database. But the Federal Circuit has recently pushed the Alice test closer toward patentees, and the Board appears to be following their lead. This is shown in a pair of recently-decided appeals involving business method applications.

In Ex parte Bhogal (PTAB Mar. 19, 2018), the Board found that the claimed method recited more than the alleged abstract idea by “adding a specific limitation other than what is well-understood, routine and conventional in the field.” The Board acknowledged that the claims at issue, like most business method claims, recites generic computer, network and Internet components. But citing Bascom, panel noted that the inventive concept can still be found in the non-conventional arrangement of these pieces.

Here, the appellant had argued that a claimed rendering order prioritization technique is not well-understood, routine, or conventional. The Board found this argument persuasive, noting that the Examiner did not set forth with sufficient specificity or provided any finding that this claimed technique is routine, conventional or well-understood. Importantly, the panel cited to Berkheimer v. HP Inc., No. 2017-1437, slip op. at 14 (Fed. Cir. Feb. 8, 2018) for the proposition that “[w]hether something is well-understood, routine, and conventional to a skilled artisan at the time of the patent is a factual determination.” Without such a factual finding by the Examiner, the Board found that the rejection was improper and reversed.

It is interesting to note that the Berkheimer Federal Circuit decision very recently issued: February 8, 2018. We have seen Board panels quickly adopt Federal Circuit in the past, as reported here. So the Board appears to be going out of its way to use the decision in its analysis. This may signal that the Board is eager to make patent-eligibility holdings at trial consistent with examination.

In another appeal decided the previous day, Ex parte Hoff (PTAB Mar. 16, 2018), the Examiner had argued that there is no requirement to provide “documentary evidence to demonstrate abstractness.” Answer 9. But the Examiner had only looked at the claim elements individually. In response, the Board quoted Bascom that “the inventive concept inquiry requires more than recognizing that each claim element, by itself, was known in the art.” In view of the Appellant’s explanation of the effect of coordinated claim elements, the rejection does not sufficiently establish that the combined activity of various claim elements, as identified by the Appellant, fails to constitute significantly more than the abstract idea itself.

Both decisions involved applications with claims that have generic, conventional hardware that individually were not inventive. But the Board found in both cases that the Examiner had failed to establish on the record that the unique combinations of the elements were merely conventional or routine. Without such findings, the rejections were reversed.

The PTAB will continue to side with Examiners in affirming many abstract idea rejections of business method applications. But the recent reversals show that a compelling argument lies in the novel arrangement of claim elements. This is especially compelling if the Examiner has not established on the record that these elements are conventional or routine.